GFI Group Earnings: Here’s Why Investors are Selling Shares Now

GFI Group Inc. (NYSE:GFIG) had a loss and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 3%.

GFI Group Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-0.02 in the quarter versus EPS of $-0.06 in the year-earlier quarter.

Revenue: Decreased 11.28% to $207.29 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: GFI Group Inc. reported adjusted EPS loss of $-0.02 per share. By that measure, the company missed the mean analyst estimate of $-0.01. It missed the average revenue estimate of $213.35 million.

Quoting Management: Michael Gooch, Executive Chairman of GFI, commented: “Regulatory, market and economic uncertainty combined with seasonally slow trading resulted in difficult trading conditions in the fourth quarter. Non-GAAP net revenues and brokerage revenues were down 9.2% and 13.1%, respectively, in the fourth quarter compared to 2011. However, despite these conditions, GFI’s software, analytics and market data revenues grew 16.6% year over year in the fourth quarter, largely due to growth at Trayport, and GFI moved forward with on-going technology development and cost-reduction initiatives. We expect to continue to expand our higher-margin, subscription-based Trayport and Fenics software businesses by leveraging their networks and diversifying their product offerings.”

Key Stats (on next page)…

Revenue decreased 6.51% from $221.73 million in the previous quarter. EPS decreased to $-0.02 in the quarter versus EPS of $0.01 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.07 to a profit $0.06. For the current year, the average estimate has moved down from a profit of $0.10 to a profit of $0.09 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)